Real estate is a business based on finding and securing leads. Without a steady stream of new clients, agents and brokers will see their income dry up — fast.

Therefore, the what and how of client generation is crucial to career survival. How are agents finding their clients in 2022?

88% of sellers used a real estate agent as of mid-2022. Prior to this bounce, the share of sellers relying on agent help held steady around 82%-83% each year since 2019, according to Zillow.

The share of sellers using other resources to sell their home includes:

  • 64% who used a website on a laptop or desktop;
  • 55% who used a mobile website;
  • 51% who used an app on a smartphone or tablet;
  • 46% who relied on friends, family or neighbors, otherwise known as word of mouth;
  • 31% who used a print ad; and
  • 32% who used direct mail marketing.

Sellers continued to find their agent through various ways, with referrals the number one source of new clients. The share of sellers who reported settling on their agent through:

  • referrals was 26%, down from 28% in 2019%;
  • a real estate website was 20%, up from 2% in 2019;
  • past experience with the agent was 15%, down from 21% in 2019;
  • the community was 12%, down from 16% in 2019;
  • social media was 6%, unchanged from 2019;
  • an open house was 5%, down from 75% in 2019;
  • a search engine like Google was 4%, down from 8% in 2019; and
  • direct mail marketing was 3%, unchanged from 2019.

Agents and brokers who want to connect with new clients will take a hint from this list and allocate their time appropriately. For example, spending more time cultivating referrals will produce greater results than, say, distributing FARM letters. Further, agents who have avoided marketing on real estate websites may have gotten away with it in the past, but the importance of real estate websites in securing clients is growing rapidly.

An agent’s healthy marketing strategy uses a mix of methods to reach a wide range of targets. As we head deeper into today’s housing market slowdown, agents who want to continue producing will need to revisit their marketing strategies and make some major adjustments.

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Agents, meet your buyer clients

Since the rebound from the 2008 recession, sales agents and brokers have been laser-locked on a single type of client: sellers.

While buyers have taken more of an agent’s time and provided less assurance during the highly competitive sellers’ market of 2020-2021 and the rising prices of the past decade, listings have been a “sure thing” for agents. But as listings sit for longer and price cuts become the norm, agents will find listings to be less of a sure thing and more of a liability.

As we dive into the 2022 recession, agents will need to shift their focus to the other side of the transaction coin: homebuyers.

During an economic downturn, both buyers and sellers are harder to come by. Media reports tune in consumers to declining home prices, alerting them that today is not the right time to buy or sell (when there is a choice involved). But buyers are the preferred client, as the market will weigh solidly in their favor.

How to find these diamonds in the rough?

Agents can design a mix of marketing strategies aimed at diversifying their client portfolio, adding investors to their typical end user homebuyer clientele.

A recession is the ideal time to purchase investment property at the bottom of the market. Therefore, become an expert on popular investment strategies like forming real estate syndicates, which brings together in co-ownership a group of investors to fund the purchase, operations and eventual resale of income-producing property.

End user homebuyers and investors alike will be interested in purchasing foreclosures or short sale properties. Study and market yourself as an expert in these negative equity purchases, including purchasing real estate owned (REO) property.

There are numerous ways to stay afloat as the real estate recession intensifies heading into 2023. But the only way to maintain your stream of income — and clients — is to plan and execute your strategy today.

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